Rules for Investing-How to build a portfolio of safe, secure investment

Rules for Investing-How to build a portfolio of safe, secure investment

to invest wisely, you must have a suitable investment plan to ensure adequate amounts of growth for you. Your investment will also need to be safe and easy to manage.

Develop an investment plan:

The first step in developing an investment plan is to identify what type of investor you are. This type of investor is often determined by their life stage. Here’s a guide:

- Single people under 40 years. Focus: Long-term investments, medium to high risk. Weight: capital gain, compound growth

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- Two-income couples, no children aged 20 to 40 years. Focus: Long-term investments, medium to high risk. Weight: capital gain, compound growth

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- One-income families, small children, ages 20 to 40 years. Focus: Long-term investment, low to medium risk. Weight:. The compound growth />

- Single people aged 40 to 60 years. Focus: medium-term investments, medium risk. Weight: capital gain, compound growth

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- Married with a spouse or an independent teenager, aged 40 to 60 years. Focus: medium-term investments, medium risk. Weight: capital gain, compound growth

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- All investors aged 60 and older. Focus: Short to medium-term investment, low risk. Weight: Revenue.

Here is an example of investment portfolio mix for various types of investors.

Low Risk Investment:

Predominantly low-risk investments in cash, fixed interest and Superannuation. It has the lowest risk of all investments, but also have the lowest return – in today’s market, about 3% to 6% per year. Fixed interest includes cash, cash management trusts and bonds. They returned about 5% to 10% per year, sometimes as high as 15% if you invest in global bonds in good markets.

Back superannuation and risk profiles vary from institution to institution, but the best and safest return to normal average of 10% per year.

Medium Risk Investments:

Medium risk investments include property and non-speculative stocks. Diversified funds that invest in several asset classes that are also considered to have an average risk profile. Returns the average of the types of investments will vary from 8% to 15% per year.

I also want to involve a broad spectrum of mutual funds, which will be discussed later in the interval between high-risk investments. Some can return up to 25% and more depending on the type of funds and managers.

High-risk investments:

High risk investments include all speculative shares, futures and other types of investments that are purely speculative in nature. Due to the type of investment that we are betting prices will go up, or sometimes down, I often classify this as a form of gambling. Therefore, the return is not limited, but so is the ability to lose the total money invested.

The basic rule of investing in highly speculative stock is to build on the verge of ‘selling out’, three and three down. For example, if you buy shares of 0.00 per share, your sell-out threshold />

Selling threshold 3 12:00 />

Sell ??2 0.00 threshold />

Sell ??the 0.50 threshold />

Buy 0.00

Sell ??the 0.50 threshold />

Sell-out threshold 2 0.00

Sell-out threshold 3 00:00

Every time your stock reaches one-third limit you sell your shares.

If the stock begins to rise, you sell a third at 0.50 and then another third at 0.00 and so on. If the stock starts to fall, you can also sell the .50 the third, then another third at 0.00, and the final third at .00. This way you will never lose all your money, but you also put a cap on the total profit you will make the investment. This I find to be the best and safest way to invest in speculative stocks. In 1987 my husband and I rescued from the grave loss of Wall Street crash, because we were well and truly out of business by taking our profits beforehand. Like all other systems, this strategy will only work as long as you abide by the rules and not too greedy.

Mutual Funds:

Mutual fund investments are professionally managed by a financial institution or organization. These institutions have a variety of specialists, researchers and advisors who devote their time to ensure that the funds are invested in the best companies and assets.

In addition to the benefits of having experts manage your investments, managed funds also give you the opportunity to invest in a variety of equity, property or fixed interest markets, both locally and internationally, as a small load as, 000 In the latter case also requires a savings plan where you agree to deposit additional capital of at least 0.00 per month.

Because of managed funds covering the full spectrum of investment risk profile, you can easily cover your preferred investment portfolio, as described above, by investing in different funds.

Develop Your Investment Program:

Once you have identified your investment type, you should find a good financial advisor or use your own time to research investment opportunities.

Shares have traditionally outperformed other asset classes from time to time. However, some markets swing widely in the short term, so that each entry must always be made with long-term perspective up to 10 years. Even managed funds can best share fall if the stock market crash or a severe decline into the cycle. As long as you make sure you are with reputable fund with good managers and are willing to ride the waves, your investment will perform well in the long run. If you are short-term, low investment risk categories so you should be in a safer, more stable areas with lower returns.

Rules for Investment:

Investing may seem daunting to many people. Maybe you’ve tried once and failed, or maybe you’re just afraid of losing your money.

To avoid losing capital, you only need to be aware of the main pitfalls and always avoid them. , Simple rules can be relied upon for investment are:

Have a plan. Always make sure that you or your advisor to develop an appropriate investment for you that incorporates your risk profile, timeframe and financial goals. As stupid as it looks, many people throw headlong into investing without really working through the basic questions.

2 Do not put all your eggs in one basket. Obvious advice, but many people fail to follow it. Many people believe that they are on the right financial track by paying their family home and then buy a second property for investment purposes. Think about it! You put all your eggs in one basket of financial assets – property. What happens if the property market collapsed? Despite common thinking that this is a safe way to invest, the results are very risky. You’ve invested all well-earned money into only one region.

3 Establish the appropriate time frame. There’s an old saying, “When the tea lady starts to invest in the stock market, it’s time to get out.” What this means is when the stock market is so high that everyone starts to climb on board, may reach its peak. There are two ways a successful investment of time. The first is to always choose the low-end market for the buying and the high end of the market to sell. It is very hard to do. Even the best information experts have trouble. The second way is to select good investments and stay with them long term (say 10 years or more) and ride the market wave. For investments safely and easily, choose the second method. Do not buy into the upper end of the market and sell when it began to fall. You will definitely lose money this way.

4 Avoid high risk investments. This includes business risk, highly speculative stock, tax avoidance scheme or a too-good-to-be-true statement that promises tremendous profits high.

5 Avoid borrowing for your investments. Although some financial advisors advocate ‘gearing your investments’, this can be fraught with danger. Gearing means borrowing. If the loan for investment, will bring you more than 40% margin a fixed fee, you will cut off too well, especially if you lose your current income level.

6 Stay with the familiar and traditional. The best and surest investments are fixed interest, property and shares. Although all classes of assets will fluctuate from time to time.

Working out the optimal mix for your investment profile, have a safe plan to work with and you can not go wrong.

Marosy Ann is an accountant, consultant, and former university lecturer. He officially became the Financial Controller in a Fortune 500 company, and Finalists SA Executive Woman of the Year.

Ann is the author of the book series’ Money Programme ‘. Visit: The Domestic Exchange Program

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